This is the sixth installment of my article on why electric distribution cooperatives must operate smart distribution grids with fiber optic communications networks. The need for smart grids is arising because of: (1) profound electric utility industry restructuring ranging from energy technologies to grid infrastructure, to new customer expectations to new market entrants to new business models and (2) The availability of new and better information, communications, and network technologies and applications, more specifically the Industrial Internet of Things (IIoT).
Profound motivation for change in the electric utility industry includes: (1) erosion of the legacy electric grid infrastructure (2) growing public concern about climate change, and (3) the economic advantages of renewable/sustainable energy resources versus conventional utility generation.
LEGACY U.S. ELECTRIC UTILITY GRID INFRASTRUCTURE ERODES
As if the disintegration of the cost plus monopoly business model is not disruptive enough, the physical grid has begun to show its age and inadequacy and is further challenged by new kinds of energy resources and corresponding operational impacts.
Grid Reliability Erodes
The U.S. bulk electric system now loses power somewhere almost three times more often than 35 years ago. The number of major bulk electric system outages (i.e., affecting 100 MW or more, or 50,000 meters or more) has been increasing by about half every five years. Electric distribution outages are steadily increasing as well. Electric utilities are spending more per customer every year on maintaining grid reliability, yet the number of minutes that consumers are out of power continues to grow. Why is this?
Aging Infrastructure
As if the disintegration of the cost plus monopoly business model was not disruptive enough, the physical grid is showing its age and inadequacy.
Worsening Weather
The largest causes of electric utility outages are weather events. The frequency, severity, and duration of outage causing weather events are steadily increasing. The traditional utility solution to harden the grid, upgrade existing and construct new generation, transmission and distribution facilities, only exacerbates the effects of already rising costs.
Cyber and Physical Threats
As electric grid operations have become more automated, the cyber attack surface has increased. The federal government reports a growing frequency of electric utility cyber attacks, some originating from hostile foreign governments.
The physical security of the grid also has been and continues to be a concern. The overwhelming majority of electric utility transmission and distribution assets operate in the open, in plain sight, with limited physical security barriers.
The grid is exposed to natural and man-made disasters such as the recent the “Camp Fire” in northern California forest fires, that caused widespread, prolonged power outages and might have actually been caused by sparks from electric line switching.
Once again, to “harden” the grid enough to eliminate these issues would be prohibitively expensive, exacerbating already rising costs and declining sales.
NEW ENERGY SOURCES CHALLENGE THE LEGACY U.S. ELECTRIC GRID
As the legacy electric grid infrastructure began to erode in the 1970s, new generation infrastructure emerged, deployed by utilities, their customers, and third parties. Many of these were renewable and sustainable energy resources, or at least more efficient conventional sources (e.g. cogeneration). These do not operate in the same way that traditional generation sources did. Their output is stochastic, varying with the time of day, weather, or the owners’ preferred dispatch schemes.
Renewable Energy Sources
In the aftermath of the OPEC oil embargo, federal and state governments began to offer tax and other incentives to electric energy producers and consumers that were reducing reliance on oil imports through conservation and energy efficiency and the production and use of electricity generated by means other than carbon based fuels, especially the seven renewable energy sources (wind, solar, hydro, biomass, geothermal, ocean, hydrogen).
A key challenge is that the predominant renewable / sustainable energy resources do not operate in the same way as the legacy electric grid is accustomed to. New approaches will be required for grid operations.
(Can you say “battery storage” or “demand side management” or “smart grid”?)
Another challenge is that there are so many of them and there will be many more. The U.S. grid has about legacy utility 20,000 generating units but there are already more than a million solar arrays, millions of electric vehicles, and hundreds of millions of controllable consumer devices (i.e., demand side management). This increase in complexity requires new ways of thinking about operating the electric grid.
Sustainable Energy Sources
The support for sustainable energy resources expanded by the 1980s, due in large part to concern about global warming or climate change. The United Nations in 1987 defined sustainability as more than just renewable fuel supply, but rather “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Another definition of sustainable energy is “a form of energy production that meets today’s demand of energy without being in danger of becoming expired or depleted or banned because of unavailability of fuel or unacceptability of adverse environmental impacts, or that can be used over and over again.” Even apart from climate change concerns, sustainable resources are desirable as having the least undesirable impact on the environment.
Renewable / Sustainable Energy Resources Are Increasingly Cost Competitive
While the lifecycle cost of conventional generation continued to rise, the lifecycle cost of solar PV and wind generation and battery storage continue a long, steady decline. By 2017, in sunny parts of the US, energy from solar PV with battery storage was actually cheaper than energy from utilities’ most efficient and economic conventional generation, combined cycle natural gas plants. This occurred despite the steady decline in natural gas prices resulting from favorable improvements in exploration and production (“fracking”)
Incumbent Utility Generation Is Curtailed or Even Retired
Utilities’ legacy base load generation, including once lauded “too cheap to meter” nuclear generators were and still are being curtailed during certain times even shut down because energy from renewable sources is more economical or due to environmental protection concerns or due to operational limitations. Not only has the construction of new coal, nuclear, and gas power plants stopped, even existing generation was and still is being decommissioned because it is unneeded, uneconomic, or unsustainable. In fact, in a dramatic turn of events, in 2017, the net addition of new utility generation in the US (i.e., new conventional generation installs minus retired conventional generation plus new renewable generation) was 95% renewables! The industry had permanently turned a corner into a new age.
The next installment of this article, Part 7, will discuss the emergence of distributed energy resources (DER) and their implications for electric grid operations. They represent challenges to the current way of doing things, and substantial benefits for operating a more economical, reliable, sustainable electric grid.
